Northwest Bancshares, Inc. Announces Third Quarter 2020 Earnings and Quarterly Dividend

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Oct 26, 2020, 09:00 ET

WARREN, Pa., Oct. 26, 2020 /PRNewswire/ -- Northwest Bancshares, Inc., (the "Company"), (NasdaqGS: NWBI) announced net income for the quarter ended September 30, 2020 of $38.1 million, or $0.30 per diluted share. This represents an increase of $4.6 million, or 13.9%, compared to the same quarter last year when net income was $33.4 million, or $0.31 per diluted share. The annualized returns on average shareholders' equity and average assets for the quarter ended September 30, 2020 were 9.82% and 1.09% compared to 9.90% and 1.25% for the same quarter last year. As noted in the non-GAAP reconciliation, when adjusting for COVID-related provision expense and branch optimization related costs, non-GAAP net income was approximately $40.1 million, or $0.32 per diluted share, which would represent an increase over the same quarter in the prior year of $6.7 million, or 20.0%, and result in a return on average shareholders' equity of 10.36% and a return on average assets of 1.15%.

The Company also announced that its Board of Directors declared a quarterly cash dividend of $0.19 per share payable on November 16, 2020 to shareholders of record as of November 5, 2020. This is the 104^thconsecutive quarter in which the Company has paid a cash dividend. Based on the market value of the Company's common stock as of September 30, 2020, this represents an annualized dividend yield of approximately 8.26%.

In making this announcement, Ronald J. Seiffert, Chairman, President and CEO, noted, "We are very pleased with the many positive results in the current quarter beginning once again with strong fee income led by our mortgage banking operations. We are also delighted to report that our credit loss provision decreased significantly from the first and second quarters, as expected, and essentially mirrored net charge-offs in the third quarter. From a credit quality perspective, delinquencies continue to be well maintained and loans requesting payment deferrals have decreased significantly from last quarter from $1.312 billion, or 12.1% of the loan portfolio, at June 30, 2020 to just $212.7 million, or 2.0%, at September 30, 2020. Although classified assets jumped by $161.3 million, or 54.4%, during the quarter to $457.8 million, over 45% of total classified assets are in the hotel/hospitality industry with virtually all the increase attributable to downgrades in this sector as second deferral requests were considered."

Mr. Seiffert continued, "Looking ahead, we are anxious to execute upon the initiatives we have set in motion this year including branch optimization to be completed in December, the continued implementation of our digital strategy and capitalizing on our very successful subordinated debt offering."

Net interest income increased by $12.6 million, or 13.9%, to $103.5 million for the quarter ended September 30, 2020, from $90.9 million for the quarter ended September 30, 2019, largely due to a $6.2 million, or 6.1%, increase in interest income on loans receivable. This increase in interest income was mainly due to an increase of $2.031 billion, or 23.2%, in the average balance of loans, primarily as a result of the acquisition of MutualBank during the second quarter of 2020. Also contributing to this increase in net interest income was a decrease of $6.1 million, or 38.0%, in total interest expense due to a decline in market interest rates when compared to the prior year, resulting in a decrease in the cost of our interest-bearing liabilities to 0.42% for the quarter ended September 30, 2020 from 0.89% for the quarter ended September 30, 2019. Despite the overall increase in net interest income, net interest margin decreased to 3.26% for the quarter ended September 30, 2020 from 3.79% for the same quarter last year as interest earning asset yields decreased to 3.55% for the quarter ended September 30, 2020 from 4.41% for the quarter ended September 30, 2019. Contributing to the decline in asset yields was the increase in average cash balances of $762.8 million, earning just 0.11%, due to deposit growth associated with Payroll Protection Program ("PPP") loan funds and consumer stimulus checks. In addition, PPP loan balances of approximately $500 million with coupon rates of 1.00%, have negatively impacted overall interest earning asset yields.

The provision for credit losses increased by $3.5 million to $6.8 million for the quarter ended September 30, 2020, from $3.3 million for the quarter ended September 30, 2019. During the current year, the Company adopted ASU 2016-13, referred to as Current Expected Credit Losses ("CECL"), which requires that all financial assets measured at amortized cost be presented at the net amount expected to be collected inclusive of the entity's current estimate of all lifetime expected credit losses. In addition, the estimated economic impact of COVID-19 caused us to increase our provision expense for the quarter by approximately $1.5 million. Finally, total classified loans have increased to $457.8 million, or 4.25% of total loans, at September 30, 2020 from $205.9 million, or 2.33% of total loans, as of September 30, 2019.

Noninterest income increased by $10.5 million, or 40.1%, to $36.7 million for the quarter ended September 30, 2020, from $26.2 million for the quarter ended September 30, 2019. This increase was primarily due to the increase in mortgage banking income of $9.1 million to $11.1 million for the quarter ended September 30, 2020 from $1.9 million for the quarter ended September 30, 2019. This increase was due to continued efforts to expand our secondary market sales capabilities over the last year, as well as an interest rate environment conducive to refinance activity and attractive secondary market pricing. In addition, there was a $796,000, or 5.9%, increase in service charges and fees and a $767,000, or 16.6%, increase in trust and other financial services income, both primarily due to additional fee income as a result of the acquisition of MutualBank.

Noninterest expense increased by $16.3 million, or 23.1%, to $86.9 million for the quarter ended September 30, 2020, from $70.6 million for the quarter ended September 30, 2019. This increase resulted primarily from an increase of $6.6 million, or 16.1%, in compensation and employee benefits due to both internal growth in compensation and staff as well as the addition of MutualBank employees. Also contributing to this increase was an increase of $3.9 million, or 35.2%, in processing expenses as we continue to invest in technology and infrastructure and as activity driven utilization fees for online and mobile banking and loan origination platforms has increased. Lastly, FDIC insurance premiums increased $2.2 million due to assessment credits received in the previous year.

The provision for income taxes decreased by $1.3 million, or 13.5%, to $8.5 million for the quarter ended September 30, 2020, from $9.8 million for the quarter ended September 30, 2019. This decrease was due primarily to a lower annual effective tax rate as a result of the lower year-to-date income before taxes in the current year as well as a change in state tax apportionment.

Headquartered in Warren, Pennsylvania, Northwest Bancshares, Inc. is the holding company of Northwest Bank. Founded in 1896, Northwest Bank is a full-service financial institution offering a complete line of business and personal banking products, employee benefits and wealth management services, as well as the fulfillment of business and personal insurance needs. As of September 30, 2020, Northwest operated 205 full-service community banking offices and eight free standing drive-through facilities in Pennsylvania, New York, Ohio and Indiana. Northwest Bancshares, Inc.'s common stock is listed on the NASDAQ Global Select Market ("NWBI"). Additional information regarding Northwest Bancshares, Inc. and Northwest Bank can be accessed on-line at www.northwest.com.

Forward-Looking Statements - This release may contain forward-looking statements with respect to the financial condition and results of operations of Northwest Bancshares, Inc. including, without limitations, statements relating to the earnings outlook of the Company. These forward-looking statements involve certain risks and uncertainties. Factors that may cause actual results to differ materially from those contemplated by such forward-looking statements, include among others, the following possibilities: (1) changes in the interest rate environment; (2) competitive pressure among financial services companies; (3) general economic conditions including an increase in non-performing loans; (4) changes in legislation or regulatory requirements; (5) difficulties in continuing to improve operating efficiencies; (6) difficulties in the integration of acquired businesses or the ability to complete sales transactions; (7) increased risk associated with commercial real-estate and business loans; and (8) the effect of any pandemic, including COVID-19, war or act of terrorism. Management has no obligation to revise or update these forward-looking statements to reflect events or circumstances that arise after the date of this release.

Northwest Bancshares, Inc. and Subsidiaries Consolidated Statements of Financial Condition (Unaudited) (dollars in thousands, except per share amounts)
	September 30, 2020			December 31, 2019		September 30, 2019
Assets
Cash and cash equivalents	$	656,749		60,846		107,602
Marketable securities available-for-sale (amortized cost of $1,385,835, $815,495 and $801,465, respectively)	1,409,150			819,901		807,823
Marketable securities held-to-maturity (fair value of $16,168, $18,223 and $19,237, respectively)	15,333			18,036		18,958
Total cash and cash equivalents and marketable securities	2,081,232			898,783		934,383
Residential mortgage loans held-for-sale	25,140			7,709		8,859
Residential mortgage loans	3,118,229			2,860,418		2,887,274
Home equity loans	1,484,365			1,342,918		1,328,173
Consumer loans	1,487,083			1,125,132		1,094,293
Commercial real estate loans	3,319,743			2,754,390		2,812,839
Commercial loans	1,347,292			718,107		720,579
Total loans receivable	10,781,852			8,808,674		8,852,017
Allowance for credit losses	(140,209)			(57,941)		(52,859)
Loans receivable, net	10,641,643			8,750,733		8,799,158

Federal Home Loan Bank stock, at cost	23,171			14,740		21,401
Accrued interest receivable	36,916			25,755		27,069
Real estate owned, net	2,575			950		1,237
Premises and equipment, net	166,919			147,409		148,796
Bank-owned life insurance	252,621			189,091		187,971
Goodwill	386,044			346,103		344,720
Other intangible assets, net	21,601			23,076		22,410
Other assets	176,083			97,268		93,329
Total assets	$	13,788,805		10,493,908		10,580,474
Liabilities and shareholders' equity
Liabilities
Noninterest-bearing demand deposits	$	2,641,234		1,609,653		1,905,650
Interest-bearing demand deposits	2,663,878			1,944,108		1,678,644
Money market deposit accounts	2,396,567			1,863,998		1,828,001
Savings deposits	2,022,918			1,604,838		1,635,754
Time deposits	1,732,022			1,569,410		1,633,451
Total deposits	11,456,619			8,592,007		8,681,500

Borrowed funds	398,216			246,336		255,257
Junior subordinated debentures	128,729			121,800		121,787
Advances by borrowers for taxes and insurance	29,755			44,556		24,331
Accrued interest payable	1,002			1,142		1,314
Other liabilities	227,253			134,782		144,515
Total liabilities	12,241,574			9,140,623		9,228,704
Shareholders' equity
Preferred stock, $0.01 par value: 50,000,000 shares authorized, no shares issued	—			—		—
Common stock, $0.01 par value: 500,000,000 shares authorized, 127,801,297, 106,859,088, and 106,658,067 shares issued and outstanding, respectively	1,278			1,069		1,067
Paid-in capital	1,023,827			805,750		801,382
Retained earnings	544,695			583,407		577,018
Accumulated other comprehensive loss	(22,569)			(36,941)		(27,697)
Total shareholders' equity	1,547,231			1,353,285		1,351,770
Total liabilities and shareholders' equity	$	13,788,805		10,493,908		10,580,474

Equity to assets	11.22		%	12.90	%	12.78	%
Tangible common equity to assets	8.52		%	9.72	%	9.64	%
Book value per share	$	12.11		12.66		12.67
Tangible book value per share	$	8.92		9.21		9.23
Closing market price per share	$	9.20		16.63		16.39
Full time equivalent employees	2,523			2,209		2,218
Number of banking offices	213			181		182

Northwest Bancshares, Inc. and Subsidiaries Consolidated Statements of Income (Unaudited) (dollars in thousands, except per share amounts)
	Quarter ended
	September 30, 2020			June 30, 2020		March 31, 2020		December 31, 2019		September 30, 2019
	September 30, 2020			June 30, 2020		March 31, 2020		December 31, 2019		September 30, 2019
Interest income:
Loans receivable	$	107,241		103,012		94,973		97,866		101,091
Mortgage-backed securities	4,652			4,038		4,175		4,237		4,188
Taxable investment securities	427			439		648		683		884
Tax-free investment securities	655			564		185		201		224
FHLB dividends	218			309		262		262		307
Interest-earning deposits	221			185		135		169		172
Total interest income	113,414			108,547		100,378		103,418		106,866
Interest expense:
Deposits	8,443			9,336		11,403		12,893		13,694
Borrowed funds	1,437			1,133		1,747		1,580		2,236
Total interest expense	9,880			10,469		13,150		14,473		15,930
Net interest income	103,534			98,078		87,228		88,945		90,936
Provision for credit losses	6,818			51,750		27,637		8,223		3,302
Net interest income after provision for credit losses	96,716			46,328		59,591		80,722		87,634
Noninterest income:
Gain/(loss) on sale of investments	(12)			(8)		181		27		—
Gain on sale of loans	—			—		1,302		908		826
Service charges and fees	14,354			13,069		15,116		14,125		13,558
Trust and other financial services income	5,376			4,823		5,001		4,517		4,609
Insurance commission income	2,331			2,395		2,372		1,858		1,887
Gain/(loss) on real estate owned, net	(32)			(97)		(91)		86		(227)
Income from bank-owned life insurance	1,576			1,248		1,036		1,121		1,095
Mortgage banking income	11,055			12,022		1,194		1,494		1,921
Other operating income	2,022			2,044		1,865		4,077		2,500
Total noninterest income	36,670			35,496		27,976		28,213		26,169
Noninterest expense:
Compensation and employee benefits	47,371			40,049		42,746		42,074		40,816
Premises and occupancy costs	8,342			7,195		7,471		7,051		7,061
Office operations	4,626			3,711		3,382		4,097		3,197
Collections expense	1,264			644		474		566		747
Processing expenses	15,042			11,680		11,142		10,263		11,122
Marketing expenses	2,147			2,047		1,507		1,010		1,373
Federal deposit insurance premiums	1,498			1,618		—		—		(702)
Professional services	3,246			2,825		2,812		3,533		3,032
Amortization of intangible assets	1,781			1,760		1,651		1,634		1,702
Real estate owned expense	111			89		95		72		119
Acquisition/branch optimization expense	1,414			9,679		2,458		1,114		23
Other expenses	27			7,866		4,873		5,157		2,106
Total noninterest expense	86,869			89,163		78,611		76,571		70,596
Income/(loss) before income taxes	46,517			(7,339)		8,956		32,364		43,207
Income tax expense/(benefit)	8,467			(1,139)		1,017		6,773		9,793
Net income/(loss)	$	38,050		(6,200)		7,939		25,591		33,414

Basic earnings per share	$	0.30		(0.05)		0.08		0.24		0.32
Diluted earnings per share	$	0.30		(0.05)		0.07		0.24		0.31

Weighted average common shares outstanding - basic	126,855,810			121,480,563		105,882,553		105,627,194		105,517,707
Weighted average common shares outstanding - diluted	126,855,810			121,480,563		106,148,247		106,306,615		106,270,544

Annualized return on average equity	9.82		%	(1.63)	%	2.37	%	7.52	%	9.90	%
Annualized return on average assets	1.09		%	(0.18)	%	0.30	%	0.97	%	1.25	%
Annualized return on tangible common equity **	13.28		%	(2.22)	%	3.28	%	10.32	%	13.46	%

Efficiency ratio *	59.68		%	58.19	%	64.67	%	63.01	%	58.81	%
Annualized noninterest expense to average assets *	2.39		%	2.30	%	2.83	%	2.80	%	2.59	%

* Excludes acquisition/branch optimization expenses and amortization of intangible assets (non-GAAP).

** Excludes goodwill and other intangible assets (non-GAAP).

Northwest Bancshares, Inc. and Subsidiaries Consolidated Statements of Income (Unaudited) (dollars in thousands, except per share amounts)
	Nine months ended September 30,
	2020			2019
Interest income:
Loans receivable	$	305,226		296,943
Mortgage-backed securities	12,865			12,433
Taxable investment securities	1,514			2,718
Tax-free investment securities	1,404			643
FHLB dividends	789			794
Interest-earning deposits	541			431
Total interest income	322,339			313,962
Interest expense:
Deposits	29,182			36,323
Borrowed funds	4,317			6,118
Total interest expense	33,499			42,441
Net interest income	288,840			271,521
Provision for credit losses	86,205			14,436
Net interest income after provision for credit losses	202,635			257,085
Noninterest income:
Gain on sale of investments	161			23
Gain on sale of loans	1,302			826
Service charges and fees	42,539			38,940
Trust and other financial services income	15,200			13,248
Insurance commission income	7,098			6,210
Loss on real estate owned, net	(220)			(139)
Income from bank-owned life insurance	3,860			3,297
Mortgage banking income	24,271			2,325
Other operating income	5,931			6,464
Total noninterest income	100,142			71,194
Noninterest expense:
Compensation and employee benefits	130,166			121,012
Premises and occupancy costs	23,008			21,666
Office operations	11,719			10,036
Collections expense	2,382			1,994
Processing expenses	37,864			32,190
Marketing expenses	5,701			5,988
Federal deposit insurance premiums	3,116			685
Professional services	8,883			8,754
Amortization of intangible assets	5,192			4,909
Real estate owned expense	295			406
Acquisition/branch optimization expense	13,551			3,054
Other expenses	12,766			8,838
Total noninterest expense	254,643			219,532
Income before income taxes	48,134			108,747
Income tax expense	8,345			23,906
Net income	$	39,789		84,841

Basic earnings per share	$	0.34		0.81
Diluted earnings per share	$	0.34		0.80

Weighted average common shares outstanding - basic	118,088,122			104,626,560
Weighted average common shares outstanding - diluted	118,088,122			105,681,615

Annualized return on average equity	3.33		%	8.65	%
Annualized return on average assets	0.42		%	1.10	%
Annualized return on tangible common equity **	4.66		%	11.52	%

Efficiency ratio *	60.65		%	61.73	%
Annualized noninterest expense to average assets *	2.50		%	2.75	%

* Excludes acquisition/branch optimization expenses and amortization of intangible assets (non-GAAP).

** Excludes goodwill and other intangible assets (non-GAAP).

Northwest Bancshares, Inc. and Subsidiaries Reconciliation of Non-GAAP to GAAP Net Income (Unaudited) * (dollars in thousands, except per share amounts)
	Quarter ended September 30,					Nine months ended September 30,
	2020			2019		2020		2019
Operating results (non-GAAP):
Net interest income	$	103,534		90,936		288,840		271,521
Provision for credit losses	5,349			3,302		21,551		14,436
Noninterest income	36,670			26,169		100,142		71,194
Noninterest expense	85,455			70,573		243,092		216,478
Income taxes	9,274			9,799		29,682		24,761
Net operating income (non-GAAP)	$	40,126		33,431		94,657		87,040
Diluted earnings per share (non-GAAP)	$	0.32		0.31		0.80		0.82

Average equity	$	1,540,934		1,339,339		1,596,252		1,312,002
Average assets	13,903,655			10,568,279		12,590,018		10,289,453
Annualized return on average equity (non-GAAP)	10.36		%	9.90	%	7.92	%	8.87	%
Annualized return on average assets (non-GAAP)	1.15		%	1.26	%	1.00	%	1.13	%

Reconciliation of net operating income to net income:
Net operating income (non-GAAP)	$	40,126		33,431		94,657		87,040
Non-GAAP adjustments, net of tax:
COVID-related provision **	(1,058)			—		(33,462)		—
CECL provision impact due to acquisition of MutualBank	—			—		(13,089)		—
PPP deferred origination costs	—			—		3,034		—
COVID-related off balance sheet provision **	—			—		(1,594)		—
Acquisition/branch optimization expense	(1,018)			(17)		(9,757)		(2,199)
Net income (GAAP)	$	38,050		33,414		39,789		84,841
Diluted earnings per share (GAAP)	$	0.30		0.31		0.34		0.80

Annualized return on average equity (GAAP)	9.82		%	9.90	%	3.33	%	8.65	%
Annualized return on average assets (GAAP)	1.09		%	1.25	%	0.42	%	1.10	%

The table summarizes the Company's results from operations on a GAAP basis and on an operating (non-GAAP) basis for the periods indicated. Operating results exclude estimated COVID-related provision, CECL provision related to the acquisition of MutualBank, PPP deferred origination costs, estimated COVID-related off balance sheet provision and acquisition/branch optimization expense. The net tax effect was calculated using statutory tax rates of approximately 28.0%. The Company believes this non-GAAP presentation provides a meaningful comparison of operational performance and facilitates a more effective evaluation and comparison of results to assess performance in relation to ongoing operations.

To arrive at the non-COVID related provision estimates, the Company applied Moody's forecast scenarios prior to the onset of COVID-19 to the Company's loan portfolio at September 30, 2020.

Northwest Bancshares, Inc. and Subsidiaries Regulatory Capital Requirements (Unaudited) (dollars in thousands)
	At September 30, 2020
	Actual				Minimum capital requirements (1)				Well capitalized requirements
	Amount		Ratio		Amount		Ratio		Amount		Ratio
Total capital (to risk weighted assets)
Northwest Bancshares, Inc.	$	1,655,949	16.607	%	$	1,046,981	10.500	%	$	997,125	10.000	%
Northwest Bank	1,445,508		14.512	%	1,045,896		10.500	%	996,092		10.000	%

Tier 1 capital (to risk weighted assets)
Northwest Bancshares, Inc.	1,521,913		15.263	%	847,556		8.500	%	797,700		8.000	%
Northwest Bank	1,311,472		13.166	%	846,678		8.500	%	796,873		8.000	%

Common equity tier 1 capital (to risk weighted assets)
Northwest Bancshares, Inc.	1,273,896		12.776	%	697,988		7.000	%	648,131		6.500	%
Northwest Bank	1,311,472		13.166	%	697,264		7.000	%	647,460		6.500	%

Tier 1 capital (leverage) (to average assets)
Northwest Bancshares, Inc.	1,521,913		10.977	%	554,608		4.000	%	693,260		5.000	%
Northwest Bank	1,311,472		9.522	%	550,907		4.000	%	688,634		5.000	%

(1)

Amounts and ratios include the capital conservation buffer of 2.5%, which does not apply to Tier 1 capital to average assets (leverage ratio). For further information related to the capital conservation buffer, see "Item 1. Business - Supervision and Regulation" of our 2019 Annual Report on Form 10-K.

Northwest Bancshares, Inc. and Subsidiaries Marketable Securities (Unaudited) (dollars in thousands)
	September 30, 2020
Marketable securities available-for-sale	Amortized cost		Gross unrealized holding gains	Gross unrealized holding losses	Fair value
Debt issued by the U.S. government and agencies:
Due after ten years	$	34,000	176	—	34,176

Debt issued by government sponsored enterprises:
Due in less than one year	35,731		284	—	36,015
Due in one year through five years	253		4	—	257
Due in five years through ten years	69,135		170	(178)	69,127

Municipal securities:
Due in less than one year	4,241		18	—	4,259
Due in one year through five years	3,343		73	(2)	3,414
Due in five years through ten years	11,077		312	—	11,389
Due after ten years	92,530		2,930	—	95,460

Residential mortgage-backed securities:
Fixed rate pass-through	356,898		6,467	(102)	363,263
Variable rate pass-through	15,798		538	(18)	16,318
Fixed rate agency CMOs	710,620		13,035	(722)	722,933
Variable rate agency CMOs	52,209		369	(39)	52,539
Total residential mortgage-backed securities	1,135,525		20,409	(881)	1,155,053
Total marketable securities available-for-sale	$	1,385,835	24,376	(1,061)	1,409,150

Marketable securities held-to-maturity
Residential mortgage-backed securities:
Fixed rate pass-through	$	1,823	128	—	1,951
Variable rate pass-through	970		33	—	1,003
Fixed rate agency CMOs	11,936		659	—	12,595
Variable rate agency CMOs	604		15	—	619
Total residential mortgage-backed securities	15,333		835	—	16,168
Total marketable securities held-to-maturity	$	15,333	835	—	16,168

Northwest Bancshares, Inc. and Subsidiaries Borrowed Funds (Unaudited) (dollars in thousands)
	September 30, 2020
	Amount		Average rate
Term notes payable to the Federal Home Loan Bank (FHLB):
Payable to FHLB of Pittsburgh	$	30,000	0.40	%
Payable to the FHLB of Indianapolis acquired from MutualBank	118,107		1.70	%
Total term notes payable to the FHLB	148,107
Collateralized borrowings, due within one year	126,832		0.19	%
Subordinated debentures, net of issuance costs	$	123,277	4.00	%
Total borrowed funds *	$	398,216

As of September 30, 2020, the Company had $3.8 billion of additional borrowing capacity available with the Federal Home Loan Bank of Pittsburgh, including a $250.0 million overnight line of credit, which had no balance, as well as $103.0 million of borrowing capacity available with the Federal Reserve Bank and $110.0 million with three correspondent banks.

Northwest Bancshares, Inc. and Subsidiaries Asset Quality (Unaudited) (dollars in thousands)
	September 30, 2020			June 30, 2020		March 31, 2020		December 31, 2019		September 30, 2019
Nonaccrual loans current:
Residential mortgage loans	$	1,128		413		285		72		676
Home equity loans	366			481		592		197		607
Consumer loans	234			214		77		78		68
Commercial real estate loans	22,610			30,677		14,337		9,241		7,674
Commercial loans	6,488			6,551		3,514		3,424		3,777
Total nonaccrual loans current	$	30,826		38,336		18,805		13,012		12,802
Nonaccrual loans delinquent 30 days to 59 days:
Residential mortgage loans	$	60		61		691		674		40
Home equity loans	445			247		159		224		102
Consumer loans	230			335		143		121		246
Commercial real estate loans	692			2,372		496		196		925
Commercial loans	57			—		—		55		44
Total nonaccrual loans delinquent 30 days to 59 days	$	1,484		3,015		1,489		1,270		1,357
Nonaccrual loans delinquent 60 days to 89 days:
Residential mortgage loans	$	576		1,013		218		1,048		979
Home equity loans	618			960		539		689		436
Consumer loans	781			666		488		417		426
Commercial real estate loans	2,745			163		2,096		413		536
Commercial loans	15			768		37		341		—
Total nonaccrual loans delinquent 60 days to 89 days	$	4,735		3,570		3,378		2,908		2,377
Nonaccrual loans delinquent 90 days or more:
Residential mortgage loans	$	14,750		15,369		10,457		12,682		11,722
Home equity loans	7,845			7,060		5,816		5,635		5,966
Consumer loans	5,352			6,896		3,459		3,610		3,400
Commercial real estate loans	35,496			29,729		25,342		25,014		22,292
Commercial loans	6,310			11,535		16,685		4,739		5,741
Total nonaccrual loans delinquent 90 days or more	$	69,753		70,589		61,759		51,680		49,121
Total nonaccrual loans	$	106,798		115,510		85,431		68,870		65,657
Total nonaccrual loans	$	106,798		115,510		85,431		68,870		65,657
Loans 90 days past due and still accruing	495			77		31		32		85
Nonperforming loans	107,293			115,587		85,462		68,902		65,742
Real estate owned, net	2,575			1,897		1,075		950		1,237
Nonperforming assets	$	109,868		117,484		86,537		69,852		66,979
Nonaccrual troubled debt restructuring *	$	17,120		17,562		17,375		9,043		9,138
Accruing troubled debt restructuring	17,684			17,888		15,977		22,956		21,162
Total troubled debt restructuring	$	34,804		35,450		33,352		31,999		30,300

Nonperforming loans to total loans	1.00		%	1.06	%	0.97	%	0.78	%	0.74	%
Nonperforming assets to total assets	0.80		%	0.85	%	0.81	%	0.67	%	0.63	%
Allowance for credit losses to total loans	1.30		%	1.29	%	1.05	%	0.66	%	0.60	%
Allowance for total loans excluding PPP loan balances	1.36		%	1.36	%	N/A		N/A		N/A
Allowance for credit losses to nonperforming loans	130.68		%	121.63	%	108.70	%	84.09	%	80.40	%

*	Amounts included in nonperforming loans above.

Northwest Bancshares, Inc. and Subsidiaries Loans by Credit Quality Indicators (Unaudited) (dollars in thousands)
At September 30, 2020	Pass		Special mention *	Substandard **	Doubtful *******	Loss	Loans receivable
Personal Banking:
Residential mortgage loans	$	3,117,442	—	25,927	—	—	3,143,369
Home equity loans	1,471,919		—	12,446	—	—	1,484,365
Consumer loans	1,478,109		—	8,974	—	—	1,487,083
Total Personal Banking	6,067,470		—	47,347	—	—	6,114,817
Commercial Banking:
Commercial real estate loans	2,850,611		110,073	359,059	—	—	3,319,743
Commercial loans	1,255,255		40,631	51,406	—	—	1,347,292
Total Commercial Banking	4,105,866		150,704	410,465	—	—	4,667,035
Total loans	$	10,173,336	150,704	457,812	—	—	10,781,852
At June 30, 2020
Personal Banking:
Residential mortgage loans	$	3,196,304	—	26,451	—	—	3,222,755
Home equity loans	1,438,339		—	12,031	—	—	1,450,370
Consumer loans	1,508,129		—	9,990	—	—	1,518,119
Total Personal Banking	6,142,772		—	48,472	—	—	6,191,244
Commercial Banking:
Commercial real estate loans	3,034,984		72,755	199,993	1,092	—	3,308,824
Commercial loans	1,270,279		41,458	42,692	4,290	—	1,358,719
Total Commercial Banking	4,305,263		114,213	242,685	5,382	—	4,667,543
Total loans	$	10,448,035	114,213	291,157	5,382	—	10,858,787
At March 31, 2020
Personal Banking:
Residential mortgage loans	$	2,830,596	—	7,690	—	—	2,838,286
Home equity loans	1,345,052		—	8,211	—	—	1,353,263
Consumer loans	1,174,067		—	3,988	—	—	1,178,055
Total Personal Banking	5,349,715		—	19,889	—	—	5,369,604
Commercial Banking:
Commercial real estate loans	2,537,736		73,967	143,765	—	—	2,755,468
Commercial loans	618,267		43,071	50,464	—	—	711,802
Total Commercial Banking	3,156,003		117,038	194,229	—	—	3,467,270
Total loans	$	8,505,718	117,038	214,118	—	—	8,836,874
At December 31, 2019
Personal Banking:
Residential mortgage loans	$	2,858,582	—	9,545	—	—	2,868,127
Home equity loans	1,336,111		—	6,807	—	—	1,342,918
Consumer loans	1,120,732		—	4,400	—	—	1,125,132
Total Personal Banking	5,315,425		—	20,752	—	—	5,336,177
Commercial Banking:
Commercial real estate loans	2,538,816		80,570	135,004	—	—	2,754,390
Commercial loans	616,983		42,380	58,744	—	—	718,107
Total Commercial Banking	3,155,799		122,950	193,748	—	—	3,472,497
Total loans	$	8,471,224	122,950	214,500	—	—	8,808,674
At September 30, 2019
Personal Banking:
Residential mortgage loans	$	2,887,077	—	9,056	—	—	2,896,133
Home equity loans	1,320,930		—	7,243	—	—	1,328,173
Consumer loans	1,090,030		—	4,263	—	—	1,094,293
Total Personal Banking	5,298,037		—	20,562	—	—	5,318,599
Commercial Banking:
Commercial real estate loans	2,601,025		69,380	142,253	181	—	2,812,839
Commercial loans	639,998		37,666	42,800	115	—	720,579
Total Commercial Banking	3,241,023		107,046	185,053	296	—	3,533,418
Total loans	$	8,539,060	107,046	205,615	296	—	8,852,017

*	Includes $34.7 million, $37.4 million, $13.1 million, $10.3 million, and $8.7 million of acquired loans at September 30, 2020, June 30, 2020, March 31, 2020, December 31, 2019, and September 30, 2019, respectively.
**	Includes $129.2 million, $108.2 million, $56.8 million, $53.1 million, and $46.6 million of acquired loans at September 30, 2020, June 30, 2020, March 31, 2020, December 31, 2019, and September 30, 2019, respectively.
***	Includes $1.1 million of acquired loans at June 30, 2020.

Northwest Bancshares, Inc. and Subsidiaries Loan Delinquency (Unaudited) (dollars in thousands)
	September 30, 2020			*		June 30, 2020			*		March 31, 2020			*		December 31, 2019			*		September 30, 2019			*
(Number of loans and dollar amount of loans)
Loans delinquent 30 days to 59 days:
Residential mortgage loans	17	$	736	—	%	15	$	629	—	%	358	$	32,755	1.2	%	292	$	23,296	0.8	%	21	$	1,236	—	%
Home equity loans	129	4,984		0.3	%	118	4,569		0.3	%	190	7,061		0.5	%	173	6,469		0.5	%	149	4,774		0.4	%
Consumer loans	1,078	8,586		0.6	%	629	7,199		0.5	%	953	8,774		0.7	%	960	9,208		0.8	%	864	7,597		0.7	%
Commercial real estate loans	28	5,090		0.2	%	46	14,177		0.4	%	58	12,895		0.5	%	43	7,921		0.3	%	27	5,308		0.2	%
Commercial loans	19	1,797		0.1	%	12	1,242		0.1	%	35	7,545		1.1	%	32	1,187		0.2	%	20	362		0.1	%
Total loans delinquent 30 days to 59 days	1,271	$	21,193	0.2	%	820	$	27,816	0.3	%	1,594	$	69,030	0.8	%	1,500	$	48,081	0.5	%	1,081	$	19,277	0.2	%

Loans delinquent 60 days to 89 days:
Residential mortgage loans	65	$	4,788	0.2	%	64	$	5,364	0.2	%	11	$	511	—	%	67	$	5,693	0.2	%	95	$	5,320	0.2	%
Home equity loans	56	1,860		0.1	%	59	2,326		0.2	%	65	2,652		0.2	%	66	2,405		0.2	%	66	2,103		0.2	%
Consumer loans	323	3,049		0.2	%	258	2,916		0.2	%	265	2,610		0.2	%	395	3,302		0.3	%	288	2,632		0.2	%
Commercial real estate loans	14	4,212		0.1	%	18	3,913		0.1	%	12	2,981		0.1	%	19	1,690		0.1	%	15	1,893		0.1	%
Commercial loans	7	357		—	%	15	1,151		0.1	%	10	309		—	%	17	6,403		0.9	%	10	589		0.1	%
Total loans delinquent 60 days to 89 days	465	$	14,266	0.1	%	414	$	15,670	0.1	%	363	$	9,063	0.1	%	564	$	19,493	0.2	%	474	$	12,537	0.1	%

Loans delinquent 90 days or more: **
Residential mortgage loans	168	$	14,750	0.5	%	185	$	15,369	0.5	%	129	$	10,457	0.4	%	141	$	12,775	0.4	%	138	$	11,816	0.4	%
Home equity loans	193	7,845		0.5	%	182	7,060		0.5	%	152	5,816		0.4	%	159	5,688		0.4	%	157	5,966		0.4	%
Consumer loans	696	5,847		0.4	%	709	6,896		0.5	%	445	3,459		0.3	%	590	3,611		0.3	%	398	3,401		0.3	%
Commercial real estate loans	136	35,496		1.1	%	149	29,729		0.9	%	139	25,342		0.9	%	129	25,014		0.9	%	118	22,292		0.8	%
Commercial loans	34	6,310		0.5	%	47	11,535		0.8	%	51	16,685		2.3	%	37	4,739		0.7	%	40	5,741		0.8	%
Total loans delinquent 90 days or more	1,227	$	70,248	0.7	%	1,272	$	70,589	0.7	%	916	$	61,759	0.7	%	1,056	$	51,827	0.6	%	851	$	49,216	0.6	%

Total loans delinquent	2,963	$	105,707	1.0	%	2,506	$	114,075	1.1	%	2,873	$	139,852	1.6	%	3,120	$	119,401	1.4	%	2,406	$	81,030	0.9	%

*	Represents delinquency, in dollars, divided by the respective total amount of that type of loan outstanding.
**	Includes purchased credit deteriorated loans of $20.3 million, $18.0 million, and $298,000 at September 30, 2020, June 30, 2020, and March 31, 2020, respectively, and purchased credit impaired loans of $147,000 and $95,000 at December 31, 2019, and September 30, 2019, respectively.

Northwest Bancshares, Inc. and Subsidiaries Analysis of Loan Portfolio by Loan Sector (Unaudited) (dollars in thousands)
Loans outstanding The following table provides delinquency information for various loan sectors in our portfolio that are potentially vulnerable to the COVID-19 pandemic impacts at September 30, 2020:
At September 30, 2020	30-59 days delinquent		*		60-89 days delinquent		*		90 days or greater delinquent		*		Total delinquent		*		Current		*		Total loans receivable		*
Restaurants/bars	$	27	—	%	$	623	—	%	$	1,012	—	%	$	1,662	—	%	$	97,009	0.9	%	$	98,671	0.9	%
Hotels/hospitality	3		—	%	1,083		—	%	6,751		0.1	%	7,837		0.1	%	174,687		1.6	%	182,524		1.7	%
Gyms and fitness	—		—	%	—		—	%	5		—	%	5		—	%	5,302		—	%	5,307		—	%
Transportation	44		—	%	19		—	%	2,313		—	%	2,376		—	%	77,371		0.7	%	79,747		0.7	%
Oil and gas	7		—	%	—		—	%	23		—	%	30		—	%	11,385		0.1	%	11,415		0.1	%
Residential care facilities	—		—	%	—		—	%	—		—	%	—		—	%	233,248		2.2	%	233,248		2.2	%
Retail buildings	222		—	%	263		—	%	850		—	%	1,335		—	%	448,829		4.2	%	450,164		4.2	%
Education/student housing	—		—	%	1,427		—	%	503		—	%	1,930		—	%	144,214		1.3	%	146,144		1.4	%
Construction/development:
Education/student housing	—		—	%	—		—	%	—		—	%	—		—	%	48,175		0.4	%	48,175		0.4	%
Hotels/hospitality	—		—	%	—		—	%	—		—	%	—		—	%	25,559		0.2	%	25,559		0.2	%
Residential care facilities	—		—	%	—		—	%	—		—	%	—		—	%	36,667		0.3	%	36,667		0.3	%
All other construction/development	2,139		—	%	—		—	%	5,476		0.1	%	7,615		0.1	%	182,201		1.7	%	189,816		1.8	%
All other sectors	18,751		0.2	%	10,851		0.1	%	53,315		0.5	%	82,917		0.8	%	9,191,498		85.2	%	9,274,415		86.0	%
Total loans	$	21,193	0.2	%	$	14,266	0.1	%	$	70,248	0.7	%	$	105,707	1.0	%	$	10,676,145	99.0	%	$	10,781,852	100.0	%

*	Percent of total loans outstanding.

Loan deferrals The following table represents loans that entered into and are currently in a deferment offered by the Company to aid customers in the COVID-19 pandemic as of September 30, 2020. Of these loan deferrals, 297 borrowers applied for and received PPP loans totaling approximately $50.8 million:
	Balance as of June 30, 2020					Loans returned to full payment status, net of payments			Loans moved into a second deferral			New loans entered into first deferral			Balance as of September 30, 2020
	Number of loans	Outstanding principal balance		*		Number of loans	Outstanding principal balance		Number of loans	Outstanding principal balance		Number of loans	Outstanding principal balance		Number of loans	Outstanding principal balance			*
Residential mortgage loans	936	$	131,567	4.1	%	871	$	121,725	65	$	9,842	46	$	6,125	111	$	15,967		0.5	%
Home equity loans	652	42,836		3.0	%	625	40,606		27	2,230		21	1,409		48	3,639			0.2	%
Consumer loans	2,455	49,374		3.3	%	2,399	48,068		56	1,306		67	1,042		123	2,348			0.2	%
Commercial real estate loans	1,511	967,340		29.2	%	1,434	794,288		77	173,052		17	10,609		94	183,661			5.5	%
Commercial loans	652	120,999		8.9	%	635	119,029		17	1,970		11	5,115		28	7,085			0.5	%
Total loans	6,206	$	1,312,116	12.1	%	5,964	$	1,123,716	242	$	188,400	162	$	24,300	404	$	212,700	**	2.0	%

*	Percent of total loans outstanding by the respective total amount of that type of loan.
**	As of September 30, 2020, $177.9 million of loan deferrals expire in Q4 2020 and $34.8 million of loan deferrals expire in Q1 2021. In addition, of the $212,700 total loan deferrals, $153.2 million are in the hospitality industry.

Northwest Bancshares, Inc. and Subsidiaries Allowance for Credit Losses (Unaudited) (dollars in thousands)
	Quarter ended
	September 30, 2020			June 30, 2020		March 31, 2020		December 31, 2019		September 30, 2019
Beginning balance	$	140,586		92,897		57,941		52,859		53,107
CECL adoption	—			—		10,792		—		—
Initial allowance on loans purchased with credit deterioration	—			8,845		—		—		—
Provision	6,818			51,750		27,637		8,223		3,302
Charge-offs residential mortgage	(129)			(38)		(343)		(222)		(190)
Charge-offs home equity	(88)			(173)		(289)		(113)		(466)
Charge-offs consumer	(3,356)			(3,191)		(3,488)		(3,142)		(3,078)
Charge-offs commercial real estate	(532)			(690)		(331)		(107)		(389)
Charge-offs commercial	(4,892)			(10,349)		(815)		(1,143)		(1,151)
Recoveries	1,802			1,535		1,793		1,586		1,724
Ending balance	$	140,209		140,586		92,897		57,941		52,859
Net charge-offs to average loans, annualized	0.27		%	0.51	%	0.16	%	0.14	%	0.16	%

	Nine months ended September 30,
	2020			2019
Beginning balance	$	57,941		55,214
CECL adoption	10,792			—
Initial allowance on loans purchased with credit deterioration	8,845			—
Provision	86,205			14,436
Charge-offs residential mortgage	(510)			(944)
Charge-offs home equity	(550)			(1,008)
Charge-offs consumer	(10,035)			(8,665)
Charge-offs commercial real estate	(1,553)			(5,360)
Charge-offs commercial	(16,056)			(5,508)
Recoveries	5,130			4,694
Ending balance	$	140,209		52,859
Net charge-offs to average loans, annualized	0.32		%	0.26	%

	September 30, 2020
	Originated loans			Acquired loans		Total loans
	Balance		Reserve	Balance	Reserve	Balance	Reserve
Residential mortgage loans	$	2,794,489	10,244	348,880	1,792	3,143,369	12,036
Home equity loans	1,169,709		7,488	314,656	2,097	1,484,365	9,585
Consumer loans	1,242,220		16,433	244,863	3,427	1,487,083	19,860
Personal Banking Loans	5,206,418		34,165	908,399	7,316	6,114,817	41,481
Commercial real estate loans	2,488,967		66,960	830,776	20,020	3,319,743	86,980
Commercial loans	1,147,492		8,455	199,800	3,293	1,347,292	11,748
Commercial Banking Loans	3,636,459		75,415	1,030,576	23,313	4,667,035	98,728
Total Loans	$	8,842,877	109,580	1,938,975	30,629	10,781,852	140,209

Northwest Bancshares, Inc. and Subsidiaries Average Balance Sheet (Unaudited) (dollars in thousands)
The following table sets forth certain information relating to the Company's average balance sheet and reflects the average yield on assets and average cost of liabilities for the periods indicated. Such yields and costs are derived by dividing income or expense by the average balance of assets or liabilities, respectively, for the periods presented. Average balances are calculated using daily averages.
	Quarter ended
	September 30, 2020					June 30, 2020					March 31, 2020					December 31, 2019					September 30, 2019
	Average balance		Interest	Avg. yield/ cost (h)		Average balance		Interest	Avg. yield/ cost (h)		Average balance		Interest	Avg. yield/ cost (h)		Average balance		Interest	Avg. yield/ cost (h)		Average balance		Interest	Avg. yield/ cost (h)
Assets:
Interest-earning assets:
Residential mortgage loans	$	3,176,436	28,769	3.62	%	$	3,092,392	29,019	3.75	%	$	2,845,483	28,062	3.94	%	$	2,847,932	28,011	3.93	%	$	2,894,716	28,991	4.01	%
Home equity loans	1,479,429		13,732	3.69	%	1,415,091		13,806	3.92	%	1,345,059		14,801	4.43	%	1,333,748		15,354	4.57	%	1,316,033		16,131	4.86	%
Consumer loans	1,437,828		15,851	4.39	%	1,375,130		14,993	4.39	%	1,123,336		12,160	4.35	%	1,073,565		12,016	4.44	%	1,028,579		11,916	4.60	%
Commercial real estate loans	3,306,386		36,887	4.37	%	3,156,749		34,595	4.34	%	2,747,419		31,437	4.53	%	2,741,687		32,985	4.71	%	2,796,351		34,441	4.82	%
Commercial loans	1,377,223		12,603	3.58	%	1,161,228		11,269	3.84	%	712,621		8,856	4.92	%	717,438		9,841	5.37	%	710,847		9,949	5.48	%
Total loans receivable (a) (b) (d)	10,777,302		107,842	3.98	%	10,200,590		103,682	4.09	%	8,773,918		95,316	4.37	%	8,714,370		98,207	4.47	%	8,746,526		101,428	4.60	%
Mortgage-backed securities (c)	1,004,803		4,651	1.85	%	714,657		4,038	2.26	%	668,470		4,175	2.50	%	667,910		4,237	2.54	%	641,085		4,188	2.61	%
Investment securities (c) (d)	216,081		1,336	2.47	%	170,309		1,244	2.92	%	144,152		881	2.44	%	151,289		938	2.48	%	218,753		1,168	2.14	%
FHLB stock, at cost	25,595		218	3.39	%	22,192		309	5.60	%	15,931		262	6.61	%	13,400		262	7.76	%	16,302		307	7.47	%
Other interest-earning deposits	791,601		221	0.11	%	623,870		185	0.12	%	34,697		135	1.54	%	31,624		169	2.09	%	28,832		172	2.33	%
Total interest-earning assets	12,815,382		114,268	3.55	%	11,731,618		109,458	3.75	%	9,637,168		100,769	4.21	%	9,578,593		103,813	4.30	%	9,651,498		107,263	4.41	%
Noninterest-earning assets (e)	1,088,273					1,858,513					960,303					869,117					916,781
Total assets	$	13,903,655				$	13,590,131				$	10,597,471				$	10,447,710				$	10,568,279
Liabilities and shareholders' equity:
Interest-bearing liabilities:
Savings deposits	$	2,015,604	648	0.13	%	$	1,884,202	648	0.14	%	$	1,611,111	727	0.18	%	$	1,615,996	792	0.19	%	$	1,658,670	788	0.19	%
Interest-bearing demand deposits	2,680,591		763	0.11	%	2,428,060		812	0.13	%	1,915,871		1,307	0.27	%	1,769,623		1,570	0.35	%	1,655,952		1,711	0.41	%
Money market deposit accounts	2,347,097		1,347	0.23	%	2,204,810		1,600	0.29	%	1,921,243		3,088	0.65	%	1,845,535		3,226	0.69	%	1,798,175		3,772	0.83	%
Time deposits	1,782,350		5,685	1.27	%	1,761,260		6,276	1.43	%	1,528,891		6,281	1.65	%	1,607,992		7,305	1.80	%	1,618,591		7,423	1.82	%
Borrowed funds (f)	420,715		717	0.68	%	371,700		296	0.32	%	240,118		709	1.19	%	177,670		444	0.99	%	243,960		1,002	1.63	%
Junior subordinated debentures	128,658		720	2.19	%	127,472		837	2.60	%	121,809		1,038	3.37	%	121,796		1,136	3.65	%	121,767		1,235	3.97	%
Total interest-bearing liabilities	9,375,015		9,880	0.42	%	8,777,504		10,469	0.48	%	7,339,043		13,150	0.72	%	7,138,612		14,473	0.80	%	7,097,115		15,931	0.89	%
Noninterest-bearing demand deposits (g)	2,703,266					2,401,368					1,640,180					1,800,861					1,915,392
Noninterest-bearing liabilities	284,440					882,391					268,139					158,434					216,433
Total liabilities	12,362,721					12,061,263					9,247,362					9,097,907					9,228,940
Shareholders' equity	1,540,934					1,528,868					1,350,109					1,349,803					1,339,339
Total liabilities and shareholders' equity	$	13,903,655				$	13,590,131				$	10,597,471				$	10,447,710				$	10,568,279
Net interest income/Interest rate spread			104,388	3.13	%			98,989	3.27	%			87,619	3.48	%			89,340	3.50	%			91,332	3.52	%
Net interest-earning assets/Net interest margin	$	3,440,367		3.26	%	$	2,954,114		3.38	%	$	2,298,125		3.66	%	$	2,439,981		3.73	%	$	2,554,383		3.79	%
Ratio of interest-earning assets to interest-bearing liabilities	1.37X					1.34X					1.31X					1.34X					1.36X

(a)	Average gross loans receivable includes loans held as available-for-sale and loans placed on nonaccrual status.
(b)	Interest income includes accretion/amortization of deferred loan fees/expenses, which was not material.
(c)	Average balances do not include the effect of unrealized gains or losses on securities held as available-for-sale.
(d)	Interest income on tax-free investment securities and tax-free loans are presented on a fully taxable equivalent ("FTE") basis.
(e)	Average balances include the effect of unrealized gains or losses on securities held as available-for-sale.
(f)	Average balances include FHLB borrowings, collateralized borrowings and subordinated debt.
(g)	Average cost of deposits were 0.29%, 0.35%, 0.53%, 0.59%, and 0.63%, respectively.
(h)	Shown on a FTE basis. GAAP basis yields for the periods indicated were: Loans - 3.96%, 4.06%, 4.35%, 4.46%, and 4.59%, respectively, Investment securities - 2.00%, 2.36%, 2.31%, 2.34%, and 2.03%, respectively, Interest-earning assets - 3.52% 3.72%, 4.19%, 4.28%, and 4.39%, respectively. GAAP basis net interest rate spreads were 3.10%, 3.24%, 3.47%, 3.48%, and 3.50%, respectively, and GAAP basis net interest margins were 3.23%, 3.34%, 3.64%, 3.71%, and 3.77%, respectively.

Northwest Bancshares, Inc. and Subsidiaries Average Balance Sheet (Unaudited) (in thousands)
The following table sets forth certain information relating to the Company's average balance sheet and reflects the average yield on interest-earning assets and average cost of interest-bearing liabilities for the periods indicated. Such yields and costs are derived by dividing income or expense by the average balance of assets or liabilities, respectively, for the periods presented. Average balances are calculated using daily averages.

	Nine months ended September 30,
	2020					2019
	Average balance		Interest	Avg. yield/ cost (h)		Average balance		Interest	Avg. yield/ cost (h)
Assets
Interest-earning assets:
Residential mortgage loans	$	3,038,712	85,850	3.77	%	$	2,865,091	87,572	4.08	%
Home equity loans	1,424,580		42,340	3.97	%	1,300,537		48,868	5.02	%
Consumer loans	1,302,282		43,004	4.41	%	949,303		32,844	4.60	%
Commercial real estate loans	3,071,047		102,918	4.40	%	2,720,435		99,930	4.84	%
Commercial loans	1,084,739		32,727	3.96	%	665,867		28,724	5.69	%
Loans receivable (a) (b) (d)	9,921,360		306,839	4.13	%	8,501,233		297,938	4.69	%
Mortgage-backed securities (c)	796,739		12,865	2.15	%	630,279		12,433	2.63	%
Investment securities (c) (d)	176,991		3,461	2.61	%	224,111		3,532	2.10	%
FHLB stock, at cost	21,255		789	4.96	%	14,840		794	7.15	%
Other interest-earning deposits	483,390		541	0.15	%	20,531		431	2.77	%
Total interest-earning assets	11,399,735		324,495	3.80	%	9,390,994		315,128	4.49	%
Noninterest-earning assets (e)	1,190,283					898,459

Total assets	$	12,590,018				$	10,289,453

Liabilities and shareholders' equity
Interest-bearing liabilities:
Savings deposits	$	1,837,624	2,023	0.15	%	$	1,668,806	2,323	0.19	%
Interest-bearing demand deposits	2,342,748		2,882	0.16	%	1,611,554		4,442	0.37	%
Money market deposit accounts	2,157,212		6,035	0.37	%	1,756,251		9,784	0.74	%
Time deposits	1,691,168		18,243	1.44	%	1,538,113		19,774	1.72	%
Borrowed funds (f)	344,457		1,721	0.67	%	216,160		2,421	1.50	%
Junior subordinated debentures	125,988		2,595	2.71	%	119,417		3,698	4.08	%
Total interest-bearing liabilities	8,499,197		33,499	0.53	%	6,910,301		42,442	0.82	%
Noninterest-bearing demand deposits (g)	2,250,864					1,847,344
Noninterest-bearing liabilities	243,705					219,806

Total liabilities	10,993,766					8,977,451

Shareholders' equity	1,596,252					1,312,002

Total liabilities and shareholders' equity	$	12,590,018				$	10,289,453

Net interest income/Interest rate spread			290,996	3.27	%			272,686	3.67	%

Net interest-earning assets/Net interest margin	$	2,900,538		3.40	%	$	2,480,693		3.87	%

Ratio of interest-earning assets to interest-bearing liabilities	1.34X					1.36X

(a)	Average gross loans includes loans held as available-for-sale and loans placed on nonaccrual status.
(b)	Interest income includes accretion/amortization of deferred loan fees/expenses, which were not material.
(c)	Average balances do not include the effect of unrealized gains or losses on securities held as available-for-sale.
(d)	Interest income on tax-free investment securities and tax-free loans are presented on a fully taxable equivalent ("FTE") basis.
(e)	Average balances include the effect of unrealized gains or losses on securities held as available-for-sale.
(f)	Average balances include FHLB borrowings, collateralized borrowings and subordinated debt.
(g)	Average cost of deposits were 0.38% and 0.58%, respectively.
(h)	Shown on a FTE basis. GAAP basis yields were: Loans — 4.11% and 4.67%, respectively; Investment securities — 2.20% and 2.00%, respectively; Interest-earning assets — 3.78% and 4.47%, respectively. GAAP basis net interest rate spreads were 3.25% and 3.65%, respectively; and GAAP basis net interest margins were 3.38% and 3.86%, respectively.